Tuesday, April 26, 2016

Also, comments are apparently moderated by default, so I'm still getting used to that. I'm not sure how to deal with comments; I'd rather not moderate them, but some of my posts here got slammed with massive amounts of truly awful spam. I'll have to see how much work it is, so bear with me.

Monday, April 18, 2016

Don't you see, Doctor?" said Lasher. "The machines are to practically everybody what the white men were to the Indians. People are finding that, because of the way the machines are changing the world, more and more of their old values don't apply any more. People have no choice but to become second-rate machines themselves, or wards of the machines.”
― Kurt Vonnegut, Player Piano

In my previous two posts, I documented that the mainstream conceit that the transition from a manufacturing/export-led economy centered around making things, to a highly-automated "post-industrial" economy centered around retail and food service, was not the painless, bloodless transition that the mainstream media and professional economists constantly make it out to be. Here's a recent column by Chris Hedges describing a typical scene:

I spent a recent weekend in the Second Presbyterian Church in Elizabeth, N.J., helping to clear out piles of old books, church records, plastic flowers, worn choir robes and other detritus that were dusty remnants of the white working-class congregation that filled these pews a few decades ago.

Elizabeth was devastated by the 1982 closure of its Singer plant, which had been built in 1873 and at one time had 10,000 workers. The 1,000 or so African-Americans at the plant worked mostly in a foundry that made cast-iron parts for the sewing machines. The work was poorly paid and dangerous. White workers, many of them German, Italian, Irish, Jewish, Polish or Lithuanian immigrants, dominated the safer and better-paid factory floor. The city was built around the sprawling plant. Generations of residents organized their lives and their families on the basis of Singer jobs or income that the facility indirectly produced. And then, after a long decline, the factory was gone.

The year Singer closed its flagship factory in Elizabeth there were 2,696 plant shutdowns across the United States, resulting in 1,287,000 job losses. Singer workers in Elizabeth under the age of 55 lost all retirement benefits, even if they had worked for the company for decades. Small businesses in the city that depended on the plant went bankrupt.

In postindustrial cities across America it is now clear, after the passage of years, that the good jobs and stability once provided by factories such as the Singer plant have been lost forever. The pent-up anger and frustration among the white working class have given birth to dark pathologies of hate. The hate is directed against those of different skin color or ethnicity who somehow seem to have heralded the changes that destroyed families and communities.

A recent report from the census bureau puts the number of Americans in poverty at a record 49.5 million when expenses are taken into account, or over 16 percent of the population, the size of a large country. A similar number lack basic health care. When concepts like "financially fragile" or "living paycheck to paycheck" are used (meaning little or no savings and income just covering expenses), numbers of over 50 percent are common. The amount of unemployed equals the population of Illinois, the nation's fifth largest state, meaning there are more unemployed people in the U.S. than there are citizens in all but Florida, New York, Texas and California. The percentage of people actively in the workforce is down to what it was in 1981, before two-income families became the norm. Life expectancy is actually decreasing for the poorest members of society. Doubling up”, or multiple generations living under the same roof (dubbed “reduced household formation” by economists ) has been on the rise, and homeownership is down for the first time in decades. The age of cars on the road is an all-time high. Food banks are regularly overwhelmed with demand. From three to six workers exist for every new job opening, and job fairs regularly attract thousands from all over for just a handful of available jobs.

Drive through "flyover country" and you'll see that all is not well in the heartland, from rural towns dominated by boarded-up storefronts, meth labs and food banks, to inner-cities dominated by crack houses, gun violence, panhandling and homelessness, to older suburbs dominated by foreclosures and dollar stores. Everything just worked out okay? But all of this is ignored in the mainstream media, who instead continue to insist that jobs are plentiful and all is well in the post-Fordist deindustrialized economy.

In fact, since the factories were shut down in the 1970-1990's, there have been any number of "[fill-in-the-blank] economies" peddled by professional economists ("knowledge" economy, "information" economy, "service" economy, "FIRE" economy, "sharing" economy, "gig" economy, etc.). They insist that making things is so twentieth-century, and that the demand for "service workers" and "knowledge workers" is bottomless. The one constant between these ever-shifting adjectives is they have all been abject failures in the real world at providing lasting prosperity for anyone outside of a tiny circle of wealthy elites.

One reason we've been able to ignore reality for so long is because the worst of the fallout from automation was dumped on the African-American community, whom we then ignored, as I've documented in the last couple of posts. That community has totally collapsed, and the success of a few winners and the easing of institutionalized discrimination was used to justify the horrible abuse, injustice, and deprivation doled out to the majority who were castigated as "lazy" and "moral failures." But the effects of automation have affected not just African-Americans. They have decimated a vast swath of society, and it's been largely ignored and covered up by government and the media. This does not bode well for the future.

That's the topic of this important post by Richard Serlin, who makes the point that, when it comes to automating away the livelihood of a large number of Americans, it has, in fact, already happened! Serlin focuses not just on African-Americans, but on all workers at the bottom of the economic pyramid. He points out some inconvenient facts which contradict the "everything just worked out okay" narrative:

People today typically debate the future with regard to robot/AI revolution, will it be much harder to get and hold a job that can support a family decently, or even pay minimum wage. Will it take much more education to achieve this? Will this happen in some hypothetical advanced robot and AI computer future? Well, for male humans, it’s not a will. It’s a has. It has, to a very large extent. The evidence...is very strong on this. And it hasn’t happened to just mere horses this time. Lower-skilled male humans are humans, and they’re vastly beyond horses. And already the robots, AI computers, and machines have brought them a long way toward the fate of the horses. And these brilliant machines are just getting started...

1) "Between 1960 and 2009, the share of men [age 25 – 64] without any formal labor-market earnings for an entire calendar year rose from 6 percent to 18 percent." (page 11)

2) "The percentage of men working full time [age 25 – 64] has decreased from 83 percent to 66 percent over the same period." (page 12)

3) "Nonemployment for an entire calendar year among men without high school diplomas [age 25 – 64] increased by 23 percentage points (from 11 to 34 percent) and among those with only a high school degree by 18 percentage points (from 4 to 22 percent)". (page 12)

4) "One way to untangle the two phenomena is to examine the median earnings among all working-age men – this time including those who earn nothing at all. What appeared as stagnant earnings for workers is really an outright decline in wages for the median men of working age. The median wage of the American male has declined by almost $13,000 after accounting for inflation in the four decades since 1969. (Using a different measure of inflation suggests a smaller, but still substantial, drop in earnings.) Indeed, earnings haven’t been this low since Ike was president and Marshal Dillon was keeping the peace in Dodge City." (page 12)

5) "Consider just men between the ages of 30 and 50, a group for whom retirement is rare. The median earnings of all men in this group declined by 27 percent between 1969 and 2009, which is nearly identical to the 28 percent decline for those who are 25 to 64 years old." (page 12)

6) "Surely, the most astonishing statistic to be gleaned from the trend data is the deterioration in the market outcomes for men with less than a high school education. The median earnings of all men in this category have declined by 66 percent [not a misprint] [from 1969 to 2009]. At the same time, this group has experienced a 23 percentage point decline in the probability of having any labor-market earnings. Roughly 10 percentage points of the 23 percentage points is attributable to the fact that more men are reporting disabilities, even though work in physically demanding jobs has been declining for many decades. Men with just a high school diploma did only marginally better. Their wages declined by 47 percent and their participation in the labor force fell by 18 percentage points." (page 13).

Now, it's true that all of these statistics are just for men. The total number of jobs has increased, due to women entering the labor force en masse, and the population increasing. Still:

1) The total labor force participation rate, which considers all of this, has declined in the last 15 years from about 67%, where it was throughout the 1990's, to about 64% (from the Current Population Survey).

2) You bring up horses to some economists, and other smart people, and sometimes the reply is, humans are different; humans are just so much more flexible and adaptable and creative than horses, as in the Dietz Vollrath quote at the start of this post.

The machines eventually got horses. They shifted the demand curve inward so much that the supply had to decrease by over 99% to keep the market wage for those horses that remained above the subsistence level. And you could have made the same argument for horses that you hear all the time for humans – It never happens. Hundreds of years technology has advanced, and we've always found jobs for as big, or bigger, a population of horses.

Well, you know what, after hundreds of years of technological advance, it finally did happen. Machines reached the point where they were so good at almost everything you could employ a horse at that there was no way for 99+% of the horses to do anything else that would pay even a subsistence market wage.

So, relatively low-skilled, low-educated males are not the entire group of humans. But, they are a class of humans, and a big one. And what these data show is that it's not just a theoretical debatable thing about the future. It's already very largely happened. They've already very largely gone the way of the horse in the face of advancing machines (and I'll discuss alternative explanations)...

So, the key point is that if foreign workers in these kinds of relatively standardized, simple, and predictable environments, with these kinds of also relatively standardized, simple, and predictable tasks, are able to so devastate employment and wages for lower-skilled American males over the last half-century, then machines would have done it anyway. Because advanced machines largely can do the same things already, and it looks like there’s a substantial probability they will be able to do the vast majority of this kind of work within the next generation or two.

Automation and efficiency has largely already eliminated the need for workers with a high-school education or less from any role whatsoever in the economic order. We take this for granted, but it was not always so. I'm sure we've all heard the stories of our penniless peasant immigrant ancestors migrating here with hardly any education at all and working their way up the ladder sweeping streets and selling newspapers, and such like. Before the 1930's it was a reality. Not any more. We've already lost a great deal of labor.

High-school educated workers have already gone the way of the horse. That's not a future scenario, it is right now.

Clearly, there have been serious and profound affects on the job market since President Johnson was warned of this phenomenon back in the 1960's, yet we've largely written them off!. All we hear from the economists is how we just created plenty of new jobs in the age of automation. After all, the "official" unemployment rate recorded by government statistics is only five percent. Five percent!!!

The message is clear: There are still enough jobs for everyone, anyone who can't get one is lazy, and anyone who is struggling just needs to head over to the nearest diploma mill and get some "skills." Here are some facts about the job market you won't hear in the official statistics, however:

● Men have been leaving the workforce since 1970. this has largely been offset by women entering the workforce, to the point where it takes two incomes to purchase the living standards that one income did before the 1970's. Since 2000, however, women have been leaving the workforce as well:

● Since 2004 median income has fallen by 13% while expenditures have risen by 14% according to latest figures pulled by Pew Research. One in three Americans can no longer afford rent, transportation, and buy food.

● The proportion of American workers who don’t have "traditional" jobs — who instead work as independent contractors, through temporary services or on-call — rose 9.4 million from 2005 to 2015. That was greater than the rise in overall employment, meaning there was a small net decline in the number of workers with conventional job.

● In February of 2016, the media widely celebrated the
official jobs report which claimed that 242,000 new jobs created. Here's
what they didn't tell you: Of the 242,000 jobs added, 304,000 of them
were part time. That means the economy actually shed 62,000 full-time
jobs.

Since March 2011 — five years ago — the U.S. economy has added 12.4 million jobs. Here’s a sampling of where those jobs have appeared:

2.2 million in ‘leisure and hospitality,’ including 1.8 million in ‘accomodation[sic] and food services.’

2.6 million in ‘education and health services,’ including 2.1 million in ‘health care and social assistance.’

1.4 million in ‘retail trade’ including 300,000 in car dealers and 260,000 in ‘food and beverage stores.’

1.3 million in ‘administrative and waste services’ for professional and business services

And there you have about two-thirds of all those job gains.

Mind you, there are plenty of good paying restaurant jobs (though median wage data is as bad as you’d imagine). There are certainly plenty of good health care jobs. And there are folks who do well working at car dealerships, too. But this is not the sign of a modern economy awakening from a slumber. It’s more like an economy snoring during a nap...

I started down this road because of a great column about last month’s job gains from ZeroHedge.com. It explained rather brutally that Americans who are losing manufacturing jobs have had no trouble picking up jobs as wait staff in bars and restaurants. And that’s the problem. The fastest-growing job categories in from that “positive” March jobs report were food and drinking establishments, retail trade, education and health, and construction. Those four categories made up about 8 out of every 10 new jobs created last month. Meanwhile, manufacturing lost 29,000 jobs. Almost exactly as many jobs as food service created.

Here’s an even bigger step back. You’ve probably heard that America is now a service economy. Here’s what that means. The U.S. has 143 million nonfarm workers — with 102 million of them working “private service.” Manufacturing and construction make up 19 million, and government 22 million.

For a very rough mental picture: put 10 American workers in a room, and roughly 7 of them would be service workers, while 3 would be making something like a house or steel, or working for the government. For a further (rough) breakdown of those 7 service workers, 3 would work in retail or a bar, 1 would be a teacher or nurse, there would be 1 ‘professional,’ 1 working in finance or real estate, and the other one would be split among things like information services, transportation, and so on.

That certainly bears out on the ground what Richard Serlin's statistics show. So we have less workers overall, and those workers are primarily working in low-wage jobs, primarily in food service, which are what the majority of jobs are (McJobs). And those service jobs are about to come under threat as Serlin describes:

You go to check out. No cashiers. The computer recognizes you, and everything in your cart, and says, “That will be $127.49 Mr. Delong. Would you like to pay with your Amazon Visa like last time?”

The (mechanized, computer driven) cart docks at a conveyer, and robots with amazing dexterity and speed bag up your groceries and call up your computer-driven car. Then, your mechanized cart (which you didn't have to push or steer. It stayed with you.) goes to your car, and robots load the bags in. The shelves are stocked by robots, and most janitorial and other functions are done by them too. And if you read The Second Machine Age, Rise of the Robots, or just out, The Master Algorithm, you’ll see that robots aren’t that far from a lot of this even now. And solar, at least in the sunbelt (reporting from Tucson), powers all these machines relatively inexpensively. The roof of the supermarket is covered with solar panels, and the parking lot is shaded completely with solar paneled canopies – This kind of thing is not that rare even today in Tucson, and Moore’s law in solar is only accelerating after more than a generation. The sun food for the machines is, and especially will be, a whole lot cheaper than the farmed food for the humans.

All those low skilled supermarket jobs reduced to just a human manager, and maybe a few humans, if that, to fill in the gaps. And the same for restaurants, factories, janitorial and maid service,… I find it very hard to think of what jobs those low-skilled people will get instead, in anywhere close to equal numbers to those lost, where those who still have jobs and wealth will want to pay at least minimum wage for their services.

So, is more education the answer? The problem is, as with high-school workers above, the education requirements for having a job--any job--keep rising. And it's doubtful than even if every one of us could get those requirements, there would be enough jobs to go around. In a society where everyone is an Einstein, Einstein sweeps the floor and empties the trashbin.

Education is more about rationing the remaining jobs than training people for the new economy.

Serlin again:

...if you say: Oh, ok, it's just horses and men who don't make the effort to become skilled and educated enough, so no problem, they just get skilled and educated enough, and then the robots and AI's are no risk. Then, what if skilled and educated enough so all this is no problem goes from high school diploma to bachelor's at a nationally known respected research university, and with the commensurate skills? Or even the commensurate skills of just the top half of such graduates today, so we can't just grade hyper-inflate our way out of this, and throw up a bunch of Potemkin colleges.

How are we supposed to get the vast majority of men, and women, up to this level of skill and education?

To do so would take a regime shift in our politics, and in public understanding of economics. By and large, one of our two major parties not only does not believe in global warming, or evolution for that matter, they don't believe in externalities, asymmetric information, natural monopoly, contracting limitations and costs, and basically anything that says the pure free market is imperfect (except in cases where it benefits the rich). But providing a massive increase in the education, skills, and general capabilities for most of the population is something that free market companies could only extract a small fraction of the benefits from in profits. And therefore they alone would grossly underprovide this.

Indeed, as David J. Blacker has documented, companies are already divesting themselves as much as possible from funding for all education. Instead, companies dump all the costs for training onto the back of the individual, because they can. In fact, some people are literally selling stock in themselves just to afford the cost of education, in a twenty-first century version of indentured servitude. Those who get the remaining jobs will mostly be those who are best able to afford it, meaning a class-stratified society based on inherited wealth. All risk is transferred off of the corporations and onto the backs of the workers themselves. Also, Neoliberalism, the prevailing economic philosophy today, believes that everything must be provided by the competitive market, and if the market does not provide it, it simply will not exist--something that does not bode well for access to education.

Instead of dealing with this, in true American fashion, we've just let
the "free market" take care of it, and what the free market has done is
primarily create a string of chains of for-profit colleges preying on
desperate workers who want to earn more than subsistence wages.

Look at the derision that Bernie Sanders' proposal of giving a free college education to Americans (which many other countries already provide) is "unrealistic" and furthermore, the money simply isn't there to do this in the world's wealthiest nation. Moreover these sentiments are not just coming from the right, but from his Democratic rival Hilary Clinton, who mockingly claims that people support Mr. Sanders only because they want "free stuff."

The externalities, contracting and enforcement problems and costs, adverse selection and other asymmetric information, and so on, are profound and enormous. This is why general education has historically been predominantly publicly funded. To say that now, so that most of the population won't go the way of horses, we have to enormously increase our investment in Heckman-style early human development, education, public nutrition, healthcare, and more, from prenatal until at least well into a person's 20's, is to say that we should have an unprecedented increase in governments' size and roles.

Right now, this is impossible, as the Republican party is dogmatically against any government, except for a small number of areas; mainly military, police, courts, prisons, and perhaps minimal public infrastructure and education.

Did we see such a massive investment in the African-American community after their jobs went away? Did we see the "Heckman-style" early childhood intervention which Serlin describes?

No, instead we saw jobless African-Americans portrayed as little more than animals, and now we're seeing that sentiment directed against "white trash" today as well. Here's a description of a now-infamous column by Kevin Williamson:

[National Review’s Kevin Williamson ] a long-time critic of The Donald, essentially agrees that he doesn’t support any policies or rhetoric directly tailored to the working-class — particularly about jobs being taken by outsourcing and immigration— because it would be wrong to do so.

“It is immoral because it perpetuates a lie: that the white working class that finds itself attracted to Trump has been victimized by outside forces,” the NR roving correspondent writes. “[N]obody did this to them. They failed themselves.”

He then goes on to state that all the ills associated with downscale whites are a result of that class’s inherent depravity.

“If you spend time in hardscrabble, white upstate New York, or eastern Kentucky, or my own native West Texas, and you take an honest look at the welfare dependency, the drug and alcohol addiction, the family anarchy—which is to say, the whelping of human children with all the respect and wisdom of a stray dog—you will come to an awful realization. It wasn’t Beijing. It wasn’t even Washington, as bad as Washington can be. It wasn’t immigrants from Mexico, excessive and problematic as our current immigration levels are. It wasn’t any of that,” Williamson state.

He then goes on to make the conclusion that it’s great these communities are dying out because they have a warped morality and are a dead weight on the economy.

“The truth about these dysfunctional, downscale communities is that they deserve to die. Economically, they are negative assets. Morally, they are indefensible,” the conservative writer says. “The white American under-class is in thrall to a vicious, selfish culture whose main products are misery and used heroin needles. Donald Trump’s speeches make them feel good. So does OxyContin. What they need isn’t analgesics, literal or political. They need real opportunity, which means that they need real change, which means that they need U-Haul. If you want to live, get out of Garbutt [a blue-collar town in New York].”

This article isn’t the first time Williamson has harshly criticized trying to appeal to working-class whites. In one February article, he said that this class is made-up of “economically and socially frustrated white men who wish to be economically supported by the federal government without enduring the stigma of welfare dependency.” He also claimed that their interests have no place in the “mainstream of American conservatism” and, in a follow-up post, said that the only message conservatives should give them is “get a job.”

While Williamson blames the people living in run-down white communities for their own woes, he does not apply the same principle to run-down minority communities. In his book and articles on the failures of Detroit, for instance, the National Review writer blames “progressivism” and unions for ruining the predominately African-American city.

That's right, labor unions and "progressivism" are the root cause of Detroit's failure, not automation or the loss of good-paying jobs, according to this line of thinking. And an angry "get a job" bellowed at the unemployed is the only answer worth contemplating, even as jobs disappear and pay less and less. Joblessness is all a result of individual failure and moral malaise--all people need to do is hit the books and climb in in the U-Haul; that is, make themselves amenable to the new economy using nothing but their own resources. And if they have little to no resources, well, then they need to grab a firm hold of their bootstraps. And to top it off, these are the same people who are diametrically opposed to raising the minimum wage. He's using the exact same phrases and sentiments that have been used against African-Americans the past forty years.

Expect to see a lot more of this thinking coming from the Right's propaganda outlets as automation accelerates.

As Serlin points out, the Republican party, which controls congress and statehouses across the country, virulently opposes expanding access to education, higher wages, or really any sort of investment in human capital whatsoever. In fact, they want to roll them back!

Of course, to win elections they have to favor Social Security and Medicare for seniors. But, from my study of politics, I think that most of those who control the party would like, if they could get away with it without losing political capital, to end Social Security and Medicare. And, in fact, they fought Social Security and Medicare tooth and nail when they were first enacted. And I also think that many of those in control of the Republican party would like, if they could get away with it at no cost in political capital, to eliminate most, if not all, publicly financed education, infrastructure, and research... Just read their platform, and the positions of their major candidates; it's pretty obvious that the direction they'd like to go in is the opposite one.

Ayn-Rand inflected free market fundamentalism is the dominant philosophy of the executive class who control the nation's wealth, and, via campaign contributions, its government. Does that sound like a society that's going to make the investments in education necessary based on the above, or one that will continue to portray a society of "makers and takers" as the jobs are automated away?

Recall that the last candidate for president on the Republican ticket claimed to his wealthy backers (secretly) that forty-seven percent of Americans, because they pay no Federal income taxes, take no responsibility for their lives, and are just looking for handouts And his vice-presidential candidate was fond of saying that America's threadbare social safety net has become, "a hammock lulling people into lives of indolence." Both called for a drastic shrinking of the safety net and massive tax cuts for the richest Americans, tax cuts that will probably ultimately help fund the technology that automates away even more jobs.

So Kevin Williamson's thinking above is not fringe at all.

So, if it's going to require a massive increase in human development, education, skills, and general capability for most men not to go the way of the horse, then that edification is not going to happen anytime soon. And things could get very bad. And for a large segment of the population, the statistics show it already has....

So, I don't think we can take that much solace in the reply, all the low-skilled men have to do is become high-skilled to avoid going the way of the horse.

If everyone went to university, there wouldn't be enough places for them. The best universities are predominantly located in urban areas with high rents, and besides, they already reject many of the people who apply to them for a variety of reasons. Furthermore, our expensive and inefficient education system is designed to take at least four years to complete because of unnecessary padding and frills (despite our insistence that it be a glorified vocational school). What are these people supposed to do in the meantime?

And even if we expanded online options, we would just have more underemployed people, or a more educated unemployed workforce. Online college won't create new jobs (except, or course, for those providing the education). The economy isn't primarily creating fast-food jobs because of a lack of education, instead, educated people are being forced to take on these jobs. Just being more educated does not automatically produce a job for that educated person. Education does not, in and of itself, produce more jobs. Only a growing economy does that, and we have had anemic growth since the 2008 financial crisis.

Conclusion

The destruction of African-American economic fortunes due to automation and the fallout from that were the major driving forces in American politics in the latter-half of the twentieth century, as we saw last time, yet this factor is almost totally ignored. Suburban sprawl, white flight, abandoned cities, ghettos, housing projects and automobile dependency can all be laid, directly or indirectly, at the feet of automation. Yes, automobile dependency--anything "public" is now associated with black people by rural and suburban whites, including public transportation, so they fight tooth and nail to prevent its expansion. Here in Wisconsin, Republicans blocked the (fully funded) train system from Milwaukee to Madison from being built by playing on white suburban fears of blacks streaming out of Milwaukee's inner-city to steal TVs during the day. In Milwaukee, a streetcar line and expansion of the bus system are also being opposed by the same suburban whites.

Even the specter of "affordable" housing in Milwaukee's distant suburbs, regardless of race, stirs virulent opposition:

We also saw that this was the primary driver of the rise of the far-right Republican party, and the near total conversion of the white working class to a strain of politics that defines itself primarily by hatred of "big government," taxes, and welfare. This hatred of "big government" sprang up after civil rights, and opposition to welfare after the epidemic of joblessness in the inner-cities. Taxes became seen as primarily funding black indolence rather than education, infrastructure, defense, and so forth. Notice that there have been no major domestic legislation initiatives since the civil rights era (Obamacare being an exception, but that inefficient system passed largely as a giveaway to big insurers).

Republicans like to portray government as inefficient and corrupt, but it is so largely through their own efforts. If Republicans truly objected to inefficiency and cronyism in government, it seems unlikely that they would elect the candidates that they do. Instead, they are responding to tribal identifiers and dog-whistles.

Why do white working-class voters vote against their own interests? It's no mystery, really.

What the opposition to government is really all about is white resentment at perceived favoritism toward African Americans and anger at social engineering. This led to the birth of a sentiment among whites that the best thing was to tear government down as much as possible, that is, to "drown it in a bathtub." Republicans wrapped themselves up as much as possible in the markers of white (especially rural) tribal identity - hunting, fishing, shooting, pickup trucks, NASCAR, country music, Jesus, the military, religious fundamentalism, flag-waving, homophobia, opposition to political correctness, hatred of "feminists" and "intellectuals, and so forth. Watch this telling clip below:

We then saw that factors like the 1994 signing of NAFTA and the 2001 entry of China into the WTO, along with automation, decimated the white working class as thoroughly as the black one, once again with a small fraction of lucky and/or talented "winners" able to escape the deluge. And the same divide-and-conquer tactics are being played out yet again, this time along class, rather than predominantly racial, lines. And we're now seeing those factors drive the next stage of our politics--candidates who promise to 'Make America Great Again," bring the jobs back, and rein in the excesses of the rich and Wall Street.

Automation is not some science-fiction scenario. We have been living with its effects for the past five decades. And it's now accelerating.

Despite the obfuscation by professional economists and the media, those earlier warnings about the fallout from automation were not, in any sense, "wrong"--they were prophetic. We need to stop bickering and start dealing with this new reality, before Detroit becomes less of a warning sign, and more the reality of Americans' day-to-day lives from coast to coast, regardless of the color of their skin. Sadly, I see few signs of us coming to grips with this new reality any more than we did in the past.

“Of course you’re right. It’s just a hell of a time to be alive, is all—just this goddamn messy business of people having to get used to new ideas. And people just don’t, that’s all. I wish this were a hundred years from now, with everybody used to the change.”
― Kurt Vonnegut, Player Piano

Sunday, April 10, 2016

So what can we learn about the future of technologically-based unemployment based on the African-American experience? A lot, I think.

As the black employment situation deteriorated thanks to automation, the government attempted a number of ham-fisted responses to the problem that ultimately ended up making the situation worse, not better. It's probably an overstatement to say that all of the political events in the latter-half of the twentieth century in America derive from those actions, but surveying the history, one is struck by how much this is the underlying factor in every major political development since the 1960s, when President Johnson was first warned of the situation.

Governments promoted "affirmative action" schemes--differential hiring policies--to give African-Americans an advantage in the job market, theoretically to make up for the disadvantages noted earlier. It favored the hiring of blacks for local government jobs which could not be shipped off to the suburbs. And it promoted minority scholarships to help blacks pay for higher education.

To cope with segregated schools, it began busing students from inner-cities to facilities throughout the city. The government funded housing "projects" to house the African-Americans unable to afford suburban homes of their own. These projects were based on utopian schemes promoted by European modernists after the war that the Europeans themselves had soundly rejected (Brutalist concrete towers devoid of green space surrounded by freeways).

The social-safety net, always statistically serving more white people than black people in absolute numbers, increasingly became relied upon by urban blacks who had their jobs eliminated due to suburbanization and automation and had nowhere else to turn as their jobs vanished. In such places, entire generations exist who have never known steady employment, leading to dysfunctional behavior patterns. Generations before, such people had worked in the factories which were now long gone.

What these policies ultimately did, however, was to drive a racial wedge between the population. Government became increasingly seen as serving "those people." The narrative that government does nothing but steal hard-working (white) people's money and give it to lazy (black) freeloaders became commonplace among the white population, fomented by a generously-funded right-wing media machine targeted to lower-income rural and suburban white voters. Conservative forces mined this racial resentment as a vehicle to dismantle the government which they had long despised due to it being a check on their power and limiting their wealth accumulation. Blacks were depicted as a parasitical "community" looking for handouts, whereas suburban whites were "rugged individualists" who earned their wealth by working hard in the "free market," and taxes, although never popular, came to be seen as simply "theft."

Busing became the match on the gasoline of suburbanization, as the last holdouts in the cities joined the mass exodus, leading to even more urban isolation and impoverishment. Affirmative action and minority scholarships fueled the racial resentment of lower-income whites, who had increasing difficulty finding jobs and funding expensive college educations for their own kids. Government and educational "quotas" became another reason for outrage directed at the Federal government. Housing projects promoted social stigma and exclusion, and ended up concentrating poverty, not alleviating it. The dense modernist flats looked more like cell blocks than homes, and were universally regarded as failures, with some even being torn down just decades after being built.

The Republican Party increasingly became the vehicle of white racial resentment and irrational hatred of government. Southern Whites, increasingly seeing the federal government as an agent of enforcing racial equality, flocked to the Republican banner. The Southern states had always resented the Federal Government going back to the Civil War and Reconstruction, and this now intensified due to its support for the Civil Rights movement under Democratic presidents. The movement of population to the Sun Belt states (encouraged by air conditioning) gave the states in Dixie more and more political influence over the entire nation. The "Southern Strategy" pioneered by Richard Nixon recast the Republican Party as the maintainer of hierarchical racial order in the face of black assertiveness. The entirely of Dixie switched overnight from Democrats to Republicans, to the extent that The South and Sunbelt became effective one-party states under Republican rule.

But it wasn't just the South--much of the country where blacks had migrated became "Dixiefied"--animated primarily by fanatical hatred and resentment of government at every level, and suspicion and disparagement of metropolitan areas (which nonetheless remained the major sources of economic activity and population growth).

In areas of the Northeast and Midwest that had seen a significant influx of black migrants who were now unemployed due to automation, racial resentment pushed working class whites into the arms of the Republican Party here too. The party transformed its identity from one that represented wealthy business interests and advocated limited government (The Rockefeller/Goldwater era), to one animated by downscale suburban and rural whites fueled by racial resentment and hatred (as well as religion). The Republicans cast themselves as the party of "law and order"-- coded dog-whistle words for keeping minorities in their place. Democrats became seen as the party of minorities, and later "political correctness" in the eyes of rural and suburban white Americans. In other words, "the other team."

This was cemented in 1980, when Ronald Reagan's first campaign stop was in Philadelphia Mississippi, the site of the murder of several civil-rights activists, calling for an assertion of "state's rights." (a common dog-whistle phrase opposing Civil Rights). Reagan touted the "Cadillac-driving welfare queen" (in reality a myth inspired by a single person), and "strapping young bucks buying T-bone steaks," as a way to gain support for destroying the social welfare system, something conservatives in America had desired since the New Deal. Affirmative action polices and quotas were used to stoke white racial grievance against the federal government. Even today, with the safety net in tatters, Obama is touted as a "food-stamp president" handing out free cell phones to poor urban blacks in right-wing Republican circles. (In reality, the size of the debt and the federal government has expanded much more slowly under Obama than under Republican presidents, especially Reagan).

The 1990's began a conservative counter-revolution with the construction of think-tanks (The Heritage Foundation, The American Enterprise Institute, etc.), lobbying groups (ALEC, the Chamber of Commerce), and a right-wing media machine with vast reach and unlimited funds (FOX news, talk radio, et. al). In 1981, famed Republican strategist Lee Atwater admitted:

You start out in 1954 by saying, “Nigger, nigger, nigger.” By 1968 you can’t say “nigger” — that hurts you, backfires. So you say stuff like, uh, forced busing, states’ rights, and all that stuff, and you’re getting so abstract. Now, you’re talking about cutting taxes, and all these things you’re talking about are totally economic things and a byproduct of them is, blacks get hurt worse than whites.… “We want to cut this,” is much more abstract than even the busing thing, uh, and a hell of a lot more abstract than “Nigger, nigger.”

Then came the drug war. It began under Nixon and ramped up under Reagan. Ostensibly to stamp out teenage "drug abuse," it resulted in an incarceration boom unprecedented in all of human history except for perhaps under Stalinist dictatorships (somehow, white taxpayers had no problem footing the bill for this). The illegal drug trade became one of the few avenues of decent incomes and entrepreneurship available to African-Americans due to its underground nature. There is even some evidence that drug abuse was encouraged in black communities to provide justification for this state of affairs. Police forces increasingly became, in David Simon's words, "An army of occupation." "Three strikes" laws, "Zero-tolerance" polices, "broken windows" policing, and "stop and frisk," were all theoretical justifications for cracking down on crime, but enforced disproportionately against urban black populations. Some places became notoriously predatory, as demonstrated by the Federal investigation of Ferguson, Missouri (a ghetto created by the loss of St. Louis' manufacturing economy).

Today, there are more African Americans in the legal system than there were slaves in 1860. One in four of the world's prisoners rots away in U.S jails (despite having less than five percent of the world's population), often under conditions described by the U.N as "torture."Many of these prisoners are coerced to work for giant corporations for pennies (slavery for convicted criminals is legal under the Constitution). The United States is the only country where more men are raped than women thanks to the brutal conditions in U.S. prisons. Inner-city schools spend more money on police than on counselors, and a school-to-prison pipeline has emerged for African-American youth. The average black teenager is statistically more likely to go to jail than attend college. the U.S. has more internal police and locks up more people than Stalinist Russia.

Everything worked out okay???

Much like white women today, black women adapted better overall to the new "caring and service-oriented" job market than did men. The few inner-city jobs left in the ghettos after suburban flight were typically minimum wage service jobs, especially in the fast-food industry, and government work. Men no longer had the wages to form a family, and predictably family formation went down. Single mothers became the norm, much to sneering derision of wealthy, conservative whites ("baby mommas"). Many black men rationally chose a shorter life and higher income potential in the dangerous black market drug trade to humiliating dead-end work at pitiful wages.

Men increasingly took out their lack of self-esteem on women, and a misogynistic culture emerged ("pimps and ho's"). Gangsters became lionized as heroes. "Thug culture" became a thing. Women increasingly turned up their noses at the black men who faced such bleak prospects, choosing rather to go it alone than have a potentially dangerous man in the house who was dead weight. The lack of hope on the part of men became institutionalized, leading to destructive attitudes passed along from generation to generation. Generations grew up without knowing their fathers, which became the norm due to lack of job and career opportunities.

At the same time, a small segment of African Americans took advantage of the new opportunities and did very well, indeed. Many moved into the professional class in various capacities--lawyers, doctors, businessmen, etc. In the post-civil rights world, this segment enjoyed opportunities that their ancestors could have only dreamed of. A few even became multi-millionaires, especially in music, acting, entertainment and professional sports. And, of course, the nation elected a president of African descent in the 2008 election.

The spectacular success of this small segment was held up as evidence that the blacks who had been left behind were simply not working hard enough, and were responsible for their own plight due to their bad behavior (rather than poor schools or a lack of jobs). Because the legalized, institutionalized racism had been removed, white America adopted a blame game where the African community simply refused to pull themselves up by their bootstraps.

This is why the "automation came along and everything worked out allright" attitude is, in my estimation, extremely racist. It dismisses the pain and suffering of an entire class of people as just somehow inevitable, or as their own fault due to their inherent nature. The social pathologies that resulted from the fallout are then pointed to as a cause of the devastation. Ask any inner-city activist the biggest problem facing their community and what will they tell you? Typically the same thing: "lack of jobs" (or perhaps substandard schools, which is just the flip side of the same coin).

The White Ghetto and Trumpism

In the 1990's two new factors emerged in this situation. The 1960s and 1970s began the rise of automation and movement of good-paying factory jobs to the suburbs and overseas for some industries (notably textiles). But economic activity still assured plenty of jobs for whites with enough family wealth to move to the suburbs throughout the 1980's and into the 1990's.

In 2001, China joined the World trade Organization (WTO). With its bottomless supply of poor rural workers moving to cities, it could outcompete nearly the entire world on labor costs. Places like Shenzen and Pearl River Delta became the world's factory floor, hollowing out manufacturing centers all across the United States and Europe. It was the death blow to these industrial economies (temporarily masked by real estate bubbles and banking fraud). China quickly became the world's largest industrial economy in the span of only a few decades.

Several rounds of "free trade" deals swept across the world as economic Neoliberalism became the predominant economic philosophy of the global economy. Capital became fluid and mobile, even as labor remained tied to hollowed-out nation states. Billions of people joined the global labor pool, empowered by the Internet. The Democratic party in America abandoned its support for unions and the white working class (who had abandoned them in droves anyway), and fully embraced Neoliberalism, although tempered with a few nods toward the safety net (the programs that primarily benefited whites), and "politically correct" social inclusiveness rhetoric.

The movement of jobs overseas became an absolute deluge. The loss of factory jobs swelled, and the final shreds of industrial America were torn apart. Vast areas of the American "heartland" were hollowed out, leading to the rural landscape of shuttered factories, meth labs and boarded up storefronts along main streets we are familiar with. Automation had finally come for rural and suburban white America. Cheap Chinese goods also enabled corporate behemoths such as Wal-Mart to undercut local businesses on price, destroying any vestige of a locally-owned economy and small businesses. McJobs replaced factory jobs as the base of the economy in most places.

As "more education" was touted as the lifeboat to get out of these communities, this, along with the aging of the the Baby Boomer population, caused an "eds and meds" economy to spring up. Education and health care became the only stable forms of employment in these remote places, ultimately sustained by government money (Medicare and student loans). These two industries quickly became predatory, leaving Americans wallowing in unpayable debts for their overpriced services. Campaign contributions ensured politicians looked the other way.

The job drain was slow enough and diffuse enough to prevent any sort of coordinated response on the part of unemployed workers. Instead they went as lambs to the slaughter, often voting for the very same people who had enabled it due to racial grievance and hot-button social issues of cultural affiliation (abortion, guns, NASCAR, etc.). Conservative media blamed "liberal permissiveness," "entitlements," and "Ivy-League elites" for the problems plaguing rural America, and stoked anger over imaginary issues such as "The war on Christmas." Americans gleefully ate-up anti-union rhetoric promoted by the corporate-owned media.

Republicans, he said, use their support of gun rights as a cornerstone in their strategy to win elections by launching “an all-out, no-holds-barred assault on government”.

“The Republicans in some way, shape or form have become a neo-anarchist party, in that they don’t accept that there is much legitimacy at all to the existence of public functions,” he said.

“The second amendment has become sacred because it’s the best way for them to express how furious they are at government. They are willing to defend the right of individuals to take up arms against it. There’s no way to get farther right on anti-government rhetoric than that.”

Note that this level of government hatred and gun fanaticism was decidedly fringe, even among white America, prior to the Civil Rights era. Now it drives what is arguably the nation's most powerful political party.

Drive though America's small towns and inner-ring suburbs, and what do you see? Good things? Everything just worked out okay? Really??? To dismiss the effects of automation, we have to pretend that all of this doesn't exist. Does automation truly create more jobs than it destroys? Drive through the urban ghettos and abandoned small towns of the Rust Belt and say that.

To say that “nothing happened to them” is stunningly wrong. Over the past 35 years the working class has been devalued, the result of an economic version of the Hunger Games. It has pitted everyone against each other, regardless of where they started. Some contestants, such as business owners, were equipped with the fanciest weapons. The working class only had their hands. They lost and have been left to deal on their own.

The consequences can be seen in nearly every town and rural county and aren’t confined to the industrial north or the hills of Kentucky either. My home town in Florida, a small town built around two orange juice factories, lost its first factory in 1985 and its last in 2005.

In the South Buffalo neighborhood of Lackawanna, homes have yet to recover from the closing of an old steel mill that looms over them. The plant, once one of many, provided the community with jobs and stability. The parts that haven’t been torn down are now used mainly for storage.

In Utica, New York, a boarded-up GE plant that’s been closed for more than 20 years sits behind Mr Nostalgia’s, a boarded-up bar where workers once spent nights. Jobs moved out of state and out of the country. The new jobs don’t pay as well and don’t offer the same benefits, so folks now go to the casino outside of town to try to supplement their income.

When you go into these communities and leave the small bubbles of success –Manhattan, Los Angeles, northern Virginia, Cambridge – and listen to people who work with their hands, you hear a uniform frustration and a constant anxiety. In a country of such amazing wealth, a large percentage of people are trying not to sink.

In Blossburg, Pennsylvania, Arnie Knapp walks five miles into town every morning, trying to keep his body in shape and not succumb to the various injuries he suffered working the mills. He started working at 14 and once they closed, he worked a series of lower-paying jobs. Unlike the characters profiled in the National Review article, he isn’t looking for a handout: “I haven’t asked for anything but work from anyone. Problem is, there aren’t a lot of jobs around here any more.”

Now, it's true that cheap Chinese labor and the invention of shipping containers temporarily eliminated the need for automation due to the oversupply of labor and ultra-low wages. But had the Chinese workers not been there, automation would have done the job anyway. In fact, manufacturing output in America continued to rise during this period, even as manufacturing employment declined. China just happened to provide a quicker, cheaper way to temporarily increase profits and lower labor costs during this period thanks to global wage arbitrage.

Here’s the problem: Whether or not those manufacturing jobs could have been saved, they aren’t coming back, at least not most of them. How do we know? Because in recent years, factories have been coming back, but the jobs haven’t. Because of rising wages in China, the need for shorter supply chains and other factors, a small but growing group of companies are shifting production back to the U.S. But the factories they build here are heavily automated, employing a small fraction of the workers they would have a generation ago.

A significant number of Americans simply weren't needed in the economic order anymore. The were useless as workers, and as they became ever-poorer, as consumers. Companies increasingly preferred citizens of the Third World not only workers, but also as consumers, as their disposable incomes were rising even as American wages were falling. Poorer Americans had no choice but to buy cheap Chinese made-consumer goods because it was all they could afford, leading to a downward spiral of lower wage jobs, offshoring, and ever-cheaper and shoddier goods.

The second major factor was the signing of the North American Free Trade Agreement in 1994.

Third-party candidate Ross Perot warned of "A giant sucking sound" of jobs leaving the United States if it were signed into law, and he was right, despite losing the race. Not only did NAFTA allow jobs to migrate across the border, the dumping of heavily subsidized and mechanized U.S. corn on the Mexican market (see the cotton example in the previous entry), devastated the rural Mexican economy. The non-mechanized small farmers of rural Mexico couldn't compete and threw in the towel.

Much like African Americans half a century before, they too began a mass migration to "El Norte" to look for work. Millions of migrants, primarily from Northern Mexico, flooded into the United States in a very short time span to do the work Americans supposedly "didn't want to do." Rural economies, especially in the Southwest, had long depended upon migrant labor from Mexico, but now that model was expanded to all aspects of the unskilled labor market--building and construction, child-care, cooking, cleaning, gardening, landscaping, laundry, food-service, delivery, manual labor, and so forth. America became a bilingual society overnight, and the ability to speak Spanish increasingly became a job requirement for many positions.

Unlike blacks who had been confined to the ghetto outside of Dixie, Mexicans went to all locations--rural, urban and suburban, forming a massive exploited proletariat willing to work for much, much less than native-born Americans. The third largest influx of foreign currency into the Mexican economy is remittances from Mexicans living abroad, mainly in the United States. The Mexican government no longer had to deal with poverty or unemployment within their own borders; they could export their poverty to the United States and watch the currency roll in. Despite handwringing, both major parties supported this trend, supported by campaign cash, even as they condemned it in public. Wages dropped and profits soared.

In the 1990-2000's, competition from Chinese workers abroad and Mexican immigrants at home finally decisively broke the back of the white working class who had been able to escape the devastation wrought on black community due to automation in the 1960-1970s. At the same time, the costs of higher education soared into the stratosphere as college increasingly became the tollbooth to the few remaining middle-class jobs which had not been not offshored. Americans were required to mortgage their future and become indentured servants for even just a chance at acquiring jobs which paid more than minimum wage in the new "service economy" promoted by professional economists.

Older whites who were made redundant when factory jobs shut down used disability as a de-facto basic income guarantee scheme. Disability became the "white welfare," even as whites continued to disparage black "welfare queens." While welfare "reform" had shifted responsibility onto cash-strapped state and local governments, disability was still paid for by federal dollars. Just as with blacks, a lot of lip-service was paid to "worker retraining" for the nonexistent jobs supposedly created by automation. Social work, health care and government jobs became the only economic activity in vast swaths of middle America as the circle of prosperity receded. And, just like blacks, the whites were increasingly blamed for the reality of their own circumstances as the jobs disappeared. Here's Paul Krugman discussing the shift:

...there was a great deal of alarm over the troubles of the African-American community, where social disorder was on the rise even as explicit legal discrimination (although not de facto discrimination) was coming to an end...There were all kinds of theories, ranging from cultural hand-waving to claims that it was all because of welfare. But some people, notably William Julius Wilson, argued that the underlying cause was economic: good jobs, while still fairly plentiful in America as a whole, were disappearing from the urban centers where the A-A population was concentrated. And the social collapse, while real, followed from that underlying cause.

This story contained a clear prediction — namely, that if whites were to face a similar disappearance of opportunity, they would develop similar behavior patterns. And sure enough, with the hollowing out of the middle class, we saw (via Mark Thoma) what Kevin Williamson at National Review describes as

the welfare dependency, the drug and alcohol addiction, the family anarchy

And what is the lesson? Why, that poor whites are moral failures, and they should move to where there are opportunities (where?). It’s really extraordinary.

Oh, and lots of swipes at food stamps, welfare programs, disability insurance (which conservatives insist is riddled with fraud, despite lots of evidence to the contrary.)

It’s surely worth noting that other advanced countries, with much more generous welfare states, aren’t showing anything like the kind of social collapse we’re seeing in the U.S. heartland....the idea that somehow food stamps are why we’re breaking bad is utterly at odds with the evidence. (Just as an aside, since someone will bring it up: all of those other advanced economies are just as open to trade as we are — so whatever you think of free trade, it doesn’t necessarily cause social collapse.)

The rise of Donald Trump comes as no surprise, then. Trump combines the white racial grievance and hatred wielded by the Republican party to win lower-income white votes with a critique of the vanishing jobs and hollowing out of the labor market for lower-income whites due to outsourcing and mass immigration from Mexico. Other Republicans, dependent upon funding from the donor class who benefited disproportionately from outsourcing and immigration, could not pursue this line of rhetoric. Trump, a real estate magnate self-funding his own campaign for vanity reasons, could say these things. Polls show that a majority of Trump voters see discrimination against whites as a major concern. White Americans who had seen their lives and communities decimated by decades of globalism finally had a champion who promised to bring their jobs back, while keeping blacks and Mexicans in line; in other words, to "Make America great again."

There was no Universal Basic Income for blacks left jobless by automation. There was no wealth redistribution. There was no compensating the "losers". There was no "sharing the fruits of the technology." Rather, there was scapegoating, dehumanizing, divide and conquer, blame, hatred, discrimination, resentment and abuse from the hard-working "winners" against the lazy, growing pile of "losers." In the past that was mainly along color lines. Now, it's increasingly along class lines.

What makes you think the new effects from ongoing automation will be any different? Does anyone think we will come to our senses and realize that there simply aren't enough jobs to go around? Or will we continue to insist on individual solutions for what are ultimately societal problems? While education may be fine to help one's individual standing, it has never, in and of itself, produced jobs where there are none to be had.

What does the African-American experience portend about our future in the age of automation?

- The poor majority will become trapped in ghettos, homeless encampments, and "slumburbs," as America Balkanizes along income lines. Your fate will be increasingly tied to the accident of where you were born. Already, social mobility is primarily determined by your ZIP code and what your parents' income is. Libertarian economists are already predicting a future where 80-90 percent of us are "zero-marginal product" workers living in internet-enabled shantytowns with minimal public services and dining on canned beans, while 10-15 percent of Americans live "like today's millionaires."

- Rather than invest in methods to create new jobs, we will instead opt for a massive police state, prisons, guard labor, and mass incarceration. Already we see the police routinely using weapons that we would normally associate with war zones. Increasingly, keeping other Americans in line will become a major source of employment, and building prisons and exploiting prisoners will become a major profit center for corporate America, instead of selling new and innovative products, which most Americans will be too poor to buy anyway (aside from a few electronic toys).

- Education will continue to be touted as the "salvation" for people even as the amount of jobs declines and the educational and experience requirements keep going up for even the most basic jobs. People who are not able to acquire this lengthy and expensive education, for whatever reason, will be blamed for their own plight. Already employers are charging workers just to apply for jobs.

The social maladies caused by a disappearance of family supporting jobs and hope for the future will increasingly be pointed to as the cause of the dysfunction. Drug abuse is now causing devastation in the white community just as thoroughly as it has in the black community.

Charles Murray, an intellectual for conservative think-tanks, wrote a book called The Bell Curve in the 1990's arguing that African-Americans' inferior IQ's were at the root of their plight. Now he's saying similar things about poor whites left unemployed by automation. His new book Coming Apart argues that poor whites' inferior moral behavior is the ultimate cause of the ongoing destruction of their communities. If they would just get married and hit the books, he claims, there would be no problem. Expect to see a lot more of this line of thinking coming out of right-wing think tanks and promoted in the corporate media as jobs continue to disappear.

- You also have a recrudescence of Social Darwinist philosophy. Those who can't hack it in the "free market" deserve to die "for the good of the species," according to a small but powerful segment of the business community enthralled by a crude combination of Ayn Rand's writings mixed with a bastardization of Charles Darwin. (e.g. the "Dark Enlightenment" philosophy popular in Silicon Valley).

Even as certain quarters tout education as the way out, funding for education is being slashed at every level, particularly by Republicans. In his book, The Falling Rate of Learning and the Neoliberal Endgame, David J. Blacker points out that as corporate America needs less and less people, they simply don't see a need to invest in mass education anymore; hence it is being dismantled. The people who already have dynastic wealth and resources will be fine; everyone else will not. The ladder to the middle class is being pulled up. With perennially too few jobs for workers, employees will just have to compete for the few remaining slots using whatever resources they have at their disposal in a winner-take-all, musical-chairs game. As for the rest, as Blacker points out, the precedent here is the eliminationist literature of the German Holocaust--what is the best way for authorities to deal with the excess "undesirables" in society?

In his online novel Manna, Marshall Brain imagines large amounts of people made jobless due to automation herded into vast open-air prisons and living as wards of the state. He's overly optimistic. We already have such prisons today, and they are nowhere near as pleasant. Benign neglect is the best-case scenario. The worst is the work camps of the Holocaust. "Work makes us free."American prisoners are already a major source of labor for corporations.

Forget Basic Income schemes. As the jobs disappeared over the past few decades, support for the safety net did not increase, in fact, just the opposite! The poorer people get, the stronger the desire to cast them as lazy freeloaders and shred what little remains of the social safety net, not expand it. In the 1990's, Clinton promised to "end welfare as we know it." Even as jobs disappear, more stringent requirements for working and finding a job are foisted upon the poor. As the percentage of "minorities" in America increases to become the majority (a contradiction, I know), it becomes easier to attribute the lack of jobs on people just "not wanting to work" to conservative suburban whites who still have jobs, even as their numbers shrink. Consider:

Nearly all the states with the highest percentage of minimum wage workers — full-time jobholders making $290 a week, before taxes — are in the South. These are also the same states that refuse to expand Medicaid to allow the working poor to get health care. And it’s in the same cradle of the old Confederacy where discriminatory bills are rising. Don’t blame the cities; from Birmingham to Charlotte, people are trying to open doors to higher wages and tolerance of gays, only to be rebuffed at the state level.

Hundreds of thousands of people could soon lose food stamps as states reimpose time limits and work requirements that were suspended in recent years because of high unemployment, state officials and advocates for the poor said Friday.

Alabama Republicans say they want a new bill to drastically limit state welfare programs so that recipients will get jobs — but the bill eliminates the most common means of transportation to and from work...The bill, created by Republican Sen. Arthur Orr, cuts the time frame for assistance from five years to three. It also creates a new layer of bureaucracy for poor people seeking help, including the requirement that they sign a contract vowing to adhere to the program’s rules. It also disqualifies people from getting food stamps or financial assistance for families with children if the recipients own cars, according to the Montgomery Advertiser.

Automation has already made a huge portion of the workforce irrelevant. We just pretend that it didn't happen. And the jobs intended to replace them, the ones "we couldn't even imagine" turned out not to exist (so no surprise we couldn't imagine them, then). This has been going on since the 1960's, we just dumped it one specific group of people until very recently, people that we could treat as nonhumans thanks to our attitudes about race. Now it coming for all of us outside of a tiny slice of hereditary wealthy and well-connected elites. As Jeremy Rifkin writes:

Not surprisingly, the first community to be devastated by the cybernetic revolution was black America. With the introduction of automated machines, it was possible to substitute less costly, inanimate forms of labor for millions of African-Americans who had long toiled at the bottom of the economic pyramid, first as plantation slaves, then as sharecroppers, and finally as unskilled labor in northern factories and foundries.

For the first time in American history, the African American was no longer needed in the economic system. Sidney Willhelm summed up the historical significance of what had taken place in his book Who Needs the Negro? "With the onset of automation the Negro moves out of his historical state of oppression into one of uselessness. Increasingly, he is not so much economically exploited as he is irrelevant...The dominant whites no longer need to exploit the black minority: as automation proceeds, it will be easier for the former to disregard the latter. In short, White America, by a more prefect application of mechanization and a vigorous reliance upon automation, disposes of the Negro; consequently, the Negro transforms from an exploited labor force into an outcast."

Now we're seeing white people join that same outcast community. And we're seeing the exact same techniques used to write them (us) off as nonpersons.

Thursday, April 7, 2016

One of the things I always hear about automation is that all the predictions of the imminent demise of jobs to date have proven false. Every time we automate work away, new jobs spring up like daisies in the springtime to take their place, says conventional thinking, and we happily go merrily along working our forty hour work weeks, because of all the gains in productivity juice the overall economy, ending up in a net gain, even as population increases. Or, if the commenters are a bit more circumspect, they at least acknowledge a difficult and troubling short "transition period," where a few people suffer a bit of hardship, but everything works out fine for everyone in the end. "Lump of labor fallacy" and all that.

I'm sure you've heard these arguments too.

The analogies between "Peak Horse" and "Peak Human" are fundamentally flawed, say such analysts. Horses are just horses. Humans, on the other hand, are infinitely adaptable, and can just learn "new skills," whatever those happen to be, and will always be relevant to the economy. Permanent unemployment of a large portion of the workforce is just not possible, they argue.

The 1930's The Technocracy Movement, a group of engineers and technicians, published a large amount of literature demonstrating that the productive forces that had been unleashed in the years prior, especially the mechanization of agriculture and the electrification of the assembly line, had made a large numbers of workers redundant. Overproduction would mean that the salaries necessary to purchase the products would not materialize, leading to economic crisis. During the Great Depression, when up to a quarter of the workforce could not find steady employment, it seemed their ideas were coming to fruition. The movement competed head-to-head politically for a time with Socialism the New Deal. After the global destruction unleashed by the war (which "stimulated" the economy), these issues were forgotten.

In 1964 a group of social activists and academics who called themselves "The Center for the Study of Democratic Institutions" sent an open letter to president Lyndon Johnson warning that automation would soon lead to mass unemployment. They signed it as "The Ad Hoc Committee on the Triple Revolution." The committee "claimed that machines would usher in "a system of almost unlimited productive capacity" while continually reducing the number of manual laborers needed, and increasing the skill needed to work, thereby producing increasing levels of unemployment." (Wikipedia).

Of course, those worries were all for nothing, say the economists. We have more jobs today than we did in 1964, and we're working more than ever! It was just another in a long line of Chicken Little predictions that didn't come true, because it can't come true, because the economy will always produce enough jobs for everyone who wants one if they're willing to work for it, say the economists. Say's Law, and all that. After all, it's 2016, and the "official" unemployment rate is only five percent!
Here's an example of such a dismissal from a wealthy, white, Stanford University academic:

This is not the first time society has fretted over the impact of ever-smarter machines on jobs and work—and not the first time we have overreacted. In the Depression-beset 1930s, labor Jeremiahs warned that robots would decimate American factory jobs. Three decades later, mid-1960s prognosticators offered a hopeful silver lining to an otherwise apocalyptic assessment of automation’s dark cloud: the displacement of work and workers would usher in a new “leisure society.”

Reality stubbornly ignored 1930s and 1960s expectations. The robots of extravagant imagination never arrived. There was ample job turbulence but as Keynes forecast in 1930, machines created more jobs than they destroyed. Boosted by a World War, unemployment dropped from a high of 25 percent in 1933 to under two percent in 1944. And the hoped-for 1960s leisure society never arrived because the diffusion of information technologies created unprecedented demand for Drucker’s “knowledge workers,” and fueled the arrival of the service economy.

Let’s not abandon Keynes just yet: In 1930, Keynes observed that technological unemployment was a self-solving problem. On balance new technologies create more jobs than they destroy. Today’s job-shedding turbulence looks no different from what scared the bejesus out of observers in the 1930s and '60s. For example, in 1965 the federal government reported that automation was wiping out 35,000 jobs per week, yet, just a few years later, it was clear that new jobs more than offset the losses. Of course, now as then, the new jobs will arrive more slowly than the old jobs are destroyed, and require ever-higher skill levels. We would be wise to worry less about extreme scenarios and focus on managing the transition.

Follow the new scarcities to the new jobs: Every new abundance creates a new scarcity that in turn leads to new economic activity. The proliferation of computers made information abundant, creating the demand for Drucker’s knowledge workers. And the material abundance made possible by machine-enabled productivity gains in turn contributed to the rise of an economy hungry for service workers. This moment is no different; immediate job losses are highly visible, while entirely new job categories run beneath the radar. Jobs will be ever less secure, but work isn’t disappearing.

I remember hearing a person making this argument recently. He was confidently assured that new technology would create new jobs, because it always did. He brought up the above track record (as they always do). He happened to work in tech. He happened to be white. He probably lived in the suburbs.

We happened to be close to downtown. When I heard this, I thought, "Take a walk a few blocks and look around. Do things seem to be going that great?" Walk a bit further and you'll be in Milwaukee's "inner city," one of the most dangerous and segregated in the nation. Derelict buildings. Boarded up storefronts. Pop-up churches. Drug clinics. Homeless shelters. Food pantries. Shootings on a daily basis. People with cardboard signs asking for money standing at every street intersection. Vast areas of the city, and I mean vast, look like war-town Beirut, Sarajevo or Baghdad, and have for decades, and we just accept this as a normal fact of life in modern-day America.

How did it happen? It was not always like this. These neighborhoods were once prosperous, walkable, middle-class areas filled with factory workers. Well-kept bungalows and two-story flats occupied the narrow lots on each block, flanked on each corner by the corner tavern (the neighborhood social hangout) and the general store. Children walked to the neighborhood school. Public works were well-maintained, parkland was abundant, and the architecture was beautiful.

The factories have long since been closed and abandoned. Huge areas of town that employed thousands of people and made industrial products shipped all over the world a generation ago are as silent as the crumbling ruins of the Roman forum. Surrounding them are vast ghettos patrolled 24-7 by cops where residents live in daily fear of drive-by shootings.

Everything just worked out okay. Really??!

In order to accept that point of view articulated above, one must refuse to acknowledge the effect that automation has already had on our society.

You see, it's pretty easy to be dismissive and nonchalant about automation if you're white. And especially if you're suburban. But to do that, you have to literally dismiss all of the above reality, which is exactly what we have done.

We've accepted the cratered cities, derelict neighborhoods, unemployment and social pathology as just the way things are. We've done this by writing off a large segment of the American people as simply unemployable. We forget that it was once any other way. Such is the power of creeping normalcy--things that would cause shock and action a generation ago just became "the way things are."

I think there is an important message here in how we will deal with automation in the near future, one that is being ignored.

So, to say that "everything worked out okay," which is the conventional wisdom promoted by the media, you have to just ignore all of this - the drugs, the crime, the social decay, the segregation, the mass incarceration of African American men, the single parent families, the welfare, the hungry school kids eating free lunches, the homelessness, the casual violence and predatory behavior directed against the African-American community by militarized police forces. To dismiss the effects of automation, all of the changes that have happened over the past forty years have to be simply imagined away.

This seems incredible, yet it is exactly what we have done! See the arguments, above, for example.
The conventional wisdom that everything worked out okay is pitched to suburbanites who live in the comfortable white-separatist enclaves which popped up in the corn fields next to freeway off-ramps thanks to America's post-war freeway building frenzy. For whites, it was "drive until you qualify," and hence you get the exurban cul-de-sac Levittowns devoid of social activity where a twenty-minute drive is required for the smallest errand, and children are heavily guarded and chauffeured around like royalty. Blacks got redlining and being pulled over for "driving while black." A single African-American family moving into a suburban neighborhood would "bring down property values" for the entire neighborhood. Ponder that for a moment.

Essentially we dumped all out unemployment on one particular community, isolated them form the rest of society in urban ghettos, and then blamed them for their own plight through a variety of various and ever-shifting reasons. It was either their "low educational attainment" or perhaps "lack of family formation." As that community fell apart due to the lack of jobs, a large amount of literature was devoted to explaining how such people were "different" due to low-IQ's and "work-resistant personalities," or some other factor, possibly genetic (and thus futile to rectify). That is, it was simply their own fault--nothing could be done--such people were simply unemployable, went the arguments in the media.

Fearful whites watched nightly reports on the local news of epidemic crime and shootings in the cities which their parents and grandparents had abandoned. The only black people that these suburban whites ever saw were mug shots on the nightly news. Out of sight, out of mind. Blacks came to be regarded by these wealthy white suburbanites as little more than animals ("superpredators" in Hillary Clinton's words). They could maybe become wards of the state, perhaps, dependent upon handouts and make-work jobs, but they should definitely stop reproducing, that is "having kids they can't afford."

Not so different than horses after all, then.

2. Black Lives Matter

In his excellent book, The End of Work, Jeremy Rifkin devotes an entire chapter describing the effects of technology on the African-American experience. Blacks, predominately in the lower echelons of American society due to racism and the legacy of slavery, have been the ones particularity hit by it. This allowed whites to completely ignore the effects of automation on the job market until relatively recently. There were still plenty of jobs in the exurban strip malls and office parks where whites had fled during the race riots and busing of the 1960-1970's. Even manual and construction labor was in demand as the suburbs continued to sprawl, amoeba like, away from the chaos and decay of America's crumbling and abandoned central city ghettos.

The dysfunction of the black community was not always the case, despite what you may have been told. In fact, it was largely brought about through automation, something we still refuse to face up to.

The following are excerpted from chapter five of the book:

The arrival of the mechanical cotton picker in the South was timely. Many black servicemen, recently back from the war, were beginning to challenge Jim Crow laws and segregation statutes that had kept them in virtual servitude since Reconstruction. Having fought for their country and been exposed to places in the United States and overseas where segregation laws did not exist, many veterans were no longer willing to accept the status quo. Some began to question their circumstances; others began to act...

In 1949 only 6 percent of the cotton in the South was harvested mechanically; by 1964, it was 78 percent. Eight years later, 100 percent of the cotton was picked by machines.

For the first time since they had been brought over as slaves to work the agricultural fields in the South, black hands and backs were no longer needed. Overnight, the sharecropper system was made obsolete by technology. Planters evicted millions of tenants from the land, leaving them homeless and jobless. Other developments hastened the process. Federal programs forced a 40 percent reduction in cotton acreage in the 1950s. Much of the land was converted to timber or pasture, which required little labor. Restrictions on tractor production were lifted after the war, greatly accelerating the substitution of tractors for manpower in the fields. The introduction of chemical defoliants to kill weeds reduced the workforce still further--black workers had traditionally been used to chop down weeds. When the Federal government extended the minimum wage to farm laborers, most southern planters found it more economical to substitute chemical defoliants for hand chopping, leaving blacks with no source of employment.

The push for mechanization in southern agriculture combined with the pull of higher wages in the industrial cities of the North to create what Nicholas Lemann called "One of the largest and most rapid mass internal movements of people in history." More than 5 million black men, women, and children migrated north in search of work between 1940 and 1970. The migration routes ran from Georgia, the Carolinas and Virginia along the Atlantic Seaboard to New York City and Boston; from Mississippi, Tennessee, Arkansas, and Alabama north to Chicago and Detroit; and from Texas and Louisiana west to California. By the time the migration was over, more than half of all black Americans had moved from South to North and from an entrenched rural way of life to become an urban industrial proletariat.

The mechanical cotton picker proved far more effective than the Emancipation Proclamation in freeing blacks from a plantation economy. It did so, however, at a terrible price. The forced eviction from the land and subsequent migration of millions of destitute black Americans to the North would soon unleash political forces of unimaginable proportions--forces that would come to test the very soul of the American compact.

At first, blacks found limited access to unskilled jobs in the auto, steel, rubber, chemical, and meat-packing industries. Northern industrialists often used them as strikebreakers or to fill the vacuum left by the decline in immigrant workers from abroad. The fortunes of black workers in the North improved steadily until 1954 and then began a forty-year historical decline.

In the mid-1950s, automation began taking its toll in the nation's manufacturing sector. Hardest hit were unskilled jobs in the very industries where black workers were concentrated. Between 1953 and 1962, 1.6 million blue collar jobs were lost in the manufacturing sector. Whereas the unemployment rate for black Americans had never exceeded 8.5 percent between 1947 and 1953, and the white rate of unemployment had never gone beyond 4.6 percent, by 1964 blacks were experiencing an unemployment rate of 12.4 percent while white unemployment was only 5.9 percent. Ever since 1964 black unemployment in the United States has remained twice that of whites.

Rifkin describes how factory work moved to the suburbs to take advantage of the fact that newer, smaller, suburban facilities were more amenable to automation, and the taxes were lower. The freeway system eliminated the need to be near railways and ports, so they could be located anywhere. The large-multi-story factories of the inner-city were replaced by one-story suburban facilities constructed in distant cornfields and wetlands accessible only bar car. Since union activity was centered in factories, these distant, diffuse facilities also permitted breaking union solidarity.

Despite the fact that Ford's River Rouge plant had room for expansion, Ford's management decided to locate as much production as possible in automated suburban plants away from the city to weaken the power of labor unions. From the late 1940s through 1957, Ford spent more than 2.5 billion on automation and plant expansion, and the other large automakers also made huge investments.

Together, the Big Three auto companies constructed twenty-five new, more automated plants in the suburbs surrounding Detroit. In addition, many smaller satellite manufacturers were forced to relocate or go out of business as automated production lines took over more of the piecemeal work, causing a further decline in urban manufacturing employment.

The number of manufacturing jobs in Detroit fell dramatically beginning in the mid-1950s as a result of automation and suburbanization of production. Black workers, who just a few years earlier were displaced by the mechanized cotton picker in the rural South, once again found themselves the victims of mechanization. In the 1950s, 25.7 percent of Chrysler workers and 23 percent of General Motors workers were African-American. Equally important, because the black workers made up the bulk of the unskilled labor force, they were the first to be let go because of automation. In 1960 a mere twenty-four black workers were counted among the 7,425 skilled workers at Chrysler. At General Motors, only sixty-seven blacks were among the more than 11,000 skilled workers on the payroll.

The productivity and unemployment figures tell the rest of the story. Between 1957 and 1964, manufacturing output doubled in the United States, while the number of blue collar workers fell by 3 percent. Again, many of the first casualties of the new automation drive were black workers, who were disproportionately represented in unskilled jobs that were the first to be eliminated by the new machines. In manufacturing operations across the entire northern and western industrial belt, the forces of automation and suburbanization continued to take their toll on unskilled black workers, leaving tens of thousands of permanently unemployed men and women in their wake.

The corporate drive to automate and relocate manufacturing jobs split the black community into two separate and distinct economic groups. Millions of unskilled workers and their families became part of what social historians now call and underclass--a permanently unemployed part of the population whose unskilled labor is no longer required and who live hand-to-mouth, generation to generation, as wards of the state. A second smaller group of black middle-class professionals have been put on the public payroll to administer the many public assistance programs designed to assist this new urban underclass. The system represents a kind of "welfare colonialism" say authors Michael Brown and Steven Erie, "where blacks were called upon to administer their own state of dependence."

It is possible that the country might have taken greater notice of the impact that automation was having on black America in the 1960s and 1970s, had not a significant number of African-Americans been absorbed into public-sector jobs. As early as 1970, sociologist Sidney Willhelm observed that "As the government becomes the foremost employer for the working force in general during the transition into automation, it becomes even more so for the black worker. Indeed, if it were not for the government, Negroes who lost their jobs in the business world would swell the unemployment ratio to fantastic heights."

The public image of an affluent and growing black middle class was enough to partly deflect attention away from the growing plight of a large new black underclass that had become the first casualty of automation and the new displacement technologies.

Today, millions of African-Americans find themselves hopelessly trapped in a permanent underclass. Unskilled and unneeded, the commodity value of their labor has been rendered virtually useless by the automated technologies that have come to displace them in the new high-tech global economy.

Rifkin is one of the few economists smart enough to realize that automation is at the heart of all this, and to remind us of the of the history. There is nothing "normal" about this situation.

So to just casually dismiss the effects if automation and nonchalantly say, "everything worked out okay," is a very racist attitude, one which is all too commonplace. To accept this, one has to relegate African-Americans to the status of nonpeople, and these decaying communities as just an inevitable outcome of black people's natural behavioral inclinations.

Now we're seeing the exact same tactics being applied in the media, only this time, the casual dismissals of the unemployment situation, and the sneering derision of those being caught up in are increasingly directed at white people rather than just African-Americans.

Look at the black community today. That's what's coming for you, While America. Your dehumanization of black people has blinded you to this fact. Now the "betters" of your own race are giving you the same treatment you gave to them.

How does it feel?

SMITH: Bowen is a huge man, 6' 7. And as we wade into the field, the plants only come up to his belt buckle. He's going to send this crop around the world. Just like the Swiss make the best watches, the Germans perfected the sports car, Americans grow the most desired cotton in the world. And just like those watches and cars, American cotton does it by being high-tech.

This is the John Deere 7760; iconic green color, big as a houseboat. Bowen bought five of them last year. And they were not cheap.

FLOWERS: They're right at 600,000 a piece. So we got in a big investment. We got to make something to make the payments on them every year.

SMITH: You bought $3 million worth of equipment last year to pick cotton.

SMITH: But these machines give Bowen an edge over small farmers in the rest of the world. He can pick cotton faster with fewer workers. Bowen can watch the progress of the pickers from his iPad sitting at home. And as cushy as it is for him, the driver up on top of the John Deere has an even sweeter gig.

Hey, we wanted to see if we could go a row with you.

I climb up a ladder up into picker number three to hitch a ride with Martovia Latrell Jones.

MARTOVIA LATRELL JONES: Oh.

SMITH: Hey, how's it going?

JONES: Good.

SMITH: Everyone calls him Toto. He puts the machine into gear.

Whoa.

And then he lets go.

You just took your hands off the wheel. You didn't even have to touch it.

JONES: Yeah. Pretty much, everything's driving itself.

SMITH: The picker feels the cotton plants. It makes all the adjustments itself. Toto just sits there, calls his wife on the cell phone, cranks up the blues station.

(SOUNDBITE OF MUSIC)

JONES: You all might not like my singing.

SMITH: Toto has a lot of time up here to sit and think. He was raised by his grandfather, George, who worked on a cotton farm before all this technology. Toto heard the stories.

JONES: Had to get down on their hands and knees and get some blisters and splinters in their fingernails and everything.

SMITH: You do realize that you probably harvest more in five minutes than he did all day long.

JONES: Ah, yeah. I can make a round and pick more than they picked in their whole lifetime.

SMITH: These machines are not only fast but, by the end of the process, the cotton they produce is clean. It's pure. It's untouched by human hands. And this is a big deal to the complicated factories around the world that make our T-shirt...